In a move that will make government financial statements more transparent, the Government Accounting Standards Board (GASB) is finally requiring state and local governments to report the funded status of their pension systems in their financial reports. This change brings the standard for government pension reporting more closely into alignment with how public companies are required to disclose their pension liabilities. For nearly all of these government entities, the vastly underfunded status of these plans will make their financials look worse. Colorado is no exception.

According to Milliman’s 2012 Public Pension Study, Colorado PERA had a funded status of just 66%. If PERA bends to pressure to lower the assumed return on plan assets from their controversial 8% estimate, the funded status would drop even further. As of the date of Milliman’s 2012 report detailing the 100 largest US public pension programs, Colorado’s $20.1 billion dollar pension shortfall was only exceeded by eight other plans. To give some further context to this $20.1 billion liability, consider this: Colorado’s entire state budget that was passed by the legislature in 2012 was just $19 billion.

PERA is not exactly embracing this measure to help shine more light on states’ financial conditions. Greg Smith, Executive Director of Colorado PERA, had this to say in the Denver Business Journal story published this week about the new GASB standards: “The liability analysis in the pension world is so unique, it’s hard to understand how transparency is increased by putting that number on a financial statement.”